Understanding Lot Size — How Much Are You Actually Trading?

When new traders place their first forex or CFD trade, they need to specify a “lot size.” Understanding lot size is critical because it directly determines how much real money you gain or lose per pip of movement.

  • Standard Lot (1.00)

    1,000 units of the base currency. Each pip is worth approximately $0.10. Ideal for beginners practising live trading with minimal financial risk.

  • Mini Lot (0.10)

    10,000 units of the base currency. Each pip is worth approximately $1. The most popular lot size among retail traders.

  • Micro Lot (0.01)

    1,000 units of the base currency. Each pip is worth approximately $0.10. Ideal for beginners practising live trading with minimal financial risk.

The Math of Lot Sizes

If EUR/USD moves 50 pips in your favour: on a Standard Lot you earn $500; on a Mini Lot, $50; on a Micro Lot, $5. The Golden Rule: never select a lot size based on the profit you want to make. Instead, calculate your lot size based on how much of your account you are willing to risk (typically 1–2%).
Key Takeaway: Lot size is the direct link between pip movement and your real profit or loss. Always calculate your lot size before placing a trade — never after.